Goldman Sachs shares were down more than 4pc in the last minutes of trading as news of Mr Weingarten's hiring was reported by Reuters. The shares closed the day down 4.7pc at $106.51 – a 12-month low.

The reasons for Mr Blankfein to hire Mr Weingarten were not immediately clear, however investors feared the worse with the bank facing continuing investigations into its conduct during the financial crisis.

A Goldman Sachs spokesman said: "As is common in such situations, Mr Blankfein and other individuals who were expected to be interviewed in connection with the Justice Department's inquiry into certain matters raised in the PSI [Senate] report hired counsel at the outset."‬

Mr Weingarten is a partner at law firm Steptoe & Johnson and has a reputation for taking on tough cases and clients.

Related Articles

"I'm used to these monstrously difficult cases where everybody hates my clients," said Mr Weingarten in an interview with AmericanLawyer.com in May.

Goldman Sachs and Mr Blankfein have been at the centre of repeated criticism since the financial crisis, and the bank became known as the "vampire squid" after one particularly strong attack in a Rolling Stone magazine article in April 2010.

An interview with The Sunday Times that was meant to restore Goldman Sachs' reputation backfired after Mr Blankfein's quip that the bank was "doing God's work" became the subject of widespread ridicule.

Mr Blankfein has testified before Congress to defend the bank's conduct, as have several other senior executives.

A fraud lawsuit brought by the US Securities and Exchange Commission was settled in July 2010 for $550m (£334m) without Goldman Sachs admitting any guilt.

The ongoing investigations against the bank largely centre on its role in selling complex credit investments to clients that were then bet against by other clients of the bank, mainly large US hedge funds that made billions of dollars when the US subprime market crashed.